Fraud alleged in Florida-based tax-return scheme

Nov. 17, 2012

Written by

Alphonso Valdez

Chris Frierson

Chris Lundy

Jeremy Blount

Marquis Butler

Terry Liggins

Five former University of South Dakota student athletes and one still on the football team have been charged in a tax refund scheme that defrauded the U.S. government of about $500,000.

Former Coyote cornerback Alphonso “Rico” Valdez, 21, was described by Tampa, Fla., federal prosecutors as the ringleader, according to a Tampa Tribune account of a court hearing there Thursday.

Valdez recruited USD athletes and people he knew in Tampa to obtain names, dates of birth and Social Security numbers and used them to file false tax returns, ssistant U.S. Attorney Sara Sweeney told a Florida judge.

Valdez and eight others are charged with conspiracy to defraud the U.S. government, punishable up to 10 years in prison. Eight of them also are charged with aggravated identity theft, which calls for a mandatory two-year prison sentence on top of the penalty for a conspiracy conviction.

From June 2011 to May 2012, South Dakota U.S. Attorney Brendan Johnson said, the defendants submitted $1.1 million in fraudulent tax refund requests; they received about $500,000 on debit cards before the fraud was uncovered.

The investigation began when a man later identified as Valdez concealed his face and used a debit card to withdraw $900 from a Vermillion ATM in April; Valdez since has left the university.

Player to sit today

The only defendant still enrolled at USD is Chris Lundy, a 21-year-old defensive back from Tampa who has played in all 10 games for the Coyotes this year. He will not play today at South Dakota State University, said his court-appointed lawyer, Bill Blewett. He said they “haven’t had a chance to talk about the details of the case yet.”

USD spokeswoman Tena Haraldson told The Associated Press that while no formal disciplinary action has been taken against Lundy, “the university feels it’s best for him not to play.” Lundy remains enrolled as a student.

Haraldson said the university has been cooperating in the investigation during the past year.

“We’ve been aware for some time that there has been an investigation going on,” she said. “We didn’t know until (Johnson’s) press release came out (Friday) who all the names were that were on the list.”

(Page 2 of 2)

Other former student athletes charged in the conspiracy:

⬛ 27-year-old Terry Liggins, a hurdler for the track team who was elected USD’s student body president but impeached in 2007;

⬛ Jeremy Blount, 24, a Tampa recruit who was a kick returner and wide receiver and later played in the Canadian Football League;

⬛ Marquis Butler, 22, a defensive back from Los Angeles; and

⬛ Chris Frierson, 21, a high school teammate of Valdez’s who played in the defensive secondary with him at USD. Frierson faces only a conspiracy charge.

The others charged are from the Tampa area and have no apparent ties to USD: Charlie Frank Adams, 21; Raunta Stanislaus Ellison, 23; and Melissa Dinataly, 22.

Ed Meierkort, former University of South Dakota football coach, said he was shocked by the sophistication of the scheme.

“Holy smokes,” Meierkort said by phone Friday. “This is surprising because it seems so high-tech, and a half a million dollars is a lot of money. I mean, that seems almost like organized crime.”

Meierkort coached USD football from 2004 to 2011, when he was fired. He now coaches high school football in Orlando, Fla., but said he had not heard about the criminal conspiracy involving his former players.

Meierkort said the alleged involvement of Lundy, Blount and Butler is especially surprising.

“A couple (players) had some issues, but obviously much less (serious). A couple of them had no issues you wouldn’t deal with in any student,” he said. “When you talk about Jeremy and Marquis, it’s surprising, it really is.”

Trouble in Tampa

The use of stolen identities in tax return fraud has plagued the Tampa area in recent years. On Nov. 6, a Tampa car dealer filed a plea agreement admitting he submitted $9 million in fraudulent refund claims.

That same day, the South Dakota case was indicted under seal.

Meierkort said he’d be surprised if the USD players dreamed up such an “elaborate” scheme on their own.

“It sure seems a little high-tech for them,” he said, adding that as a coach, “I don’t believe I’ve ever dealt with white-collar crime before. Something like this is really amazing.”

Five defendants — Valdez, Frierson, Blount, Adams and Dinataly — were arrested in the Tampa area and made initial court appearances there Thursday. They are due in court Dec. 10 in Sioux Falls.

Sweeney said Dinataly supplied Valdez with some victims’ identifying information through her former job with a health care system in St. Petersburg, Fla., according to the Tampa newspaper.

Liggins and Lundy made their first court appearances Thursday in Sioux Falls and pleaded not guilty. Each was released on $500,000 bonds.